Dropshipping is now one of the most intriguing eCommerce fulfillment techniques. It is attractive to many people globally.
We can confirm it from Google Analytics. Dropshipping (Volume:673,000/mo) has a high search volume.
There are two major reasons:
- There is no hefty investment.
- You can sell without ever touching the product.
This is not something new it is the online version of brokerage or a middleman.
Yet, you need to address many technicalities to make a good online presence of a dropshipping.
Many online platforms entertain dropshipping. As their sales have risen by the effort of these super marketers, known as dropshippers.
As dropshippers are not involved in physical processes like packaging and delivery. They invest most of the time on marketing strategies to generate potential customers.
This guide will tell you all about dropshipping. So, let’s go through every aspect of dropshipping and find the best solution for you to start.
- How Does Dropshipping Work?
- The Truth About Dropshipping
- How profitable is Dropshipping?
- Evaluating Sales Channels
- How do I start a dropshipping business?
- How to Find the Best Dropshipping Products to Sell?
- Sourcing and Working With Dropshipping Suppliers and Wholesalers
- How to Make Dropshipping a Success?
- FAQ about Dropshipping
- How Leeline Sourcing Help You Find The Best Dropshipping Suppliers and Wholesalers
- Final thoughts on dropshipping
How Does Dropshipping Work?
Dropshipping is a business method that allows you to start an online business. You can sell products to your customers without ever stocking the items yourself. In some cases the stock is with the fulfillment service provider. In other methods, you do not need it at all. The product is with the seller and you will use your magic to engage customers in your store. When someone buys a product, you will buy from the seller. After placing the order, the seller sends the product straight to the customer.
Yet, there are many things you need to ponder upon. Let’s dig in more to find a better solution!
The Truth About Dropshipping
From the above definition, it seems quite simple but it is not so easy. Because there is high competition, you have to channel energies considering ground realities. It still offers enough benefits to help you improve your low-cost business. There are spots even in the sun. So, we have the good and the bad about dropshipping. Yet, you cannot depend alone on this because of certain reasons that we will discuss later. The dropshipping could help you with the following things.
- It will give you the insight of eCommerce business that how people are selling online.
- It will enhance your marketing skills.
- You can develop good negotiation skills.
- You will understand the needs and concerns of the customers.
- Dropshipping will you understand, which products have high-profits.
- You will understand the working method of many marketplaces.
- It will help you know the difference between seasonal, event-based, and all-seasoned items.
- You will understand the delivery cycle.
- You will be able to know the profit margins.
- It will give you insight into the taxation process worldwide.
- You will understand the customer behavior of different areas.
Now, let us see the good and the bad things associated with high trending dropshipping ( volume:673,000/mo ).
By considering these you could have a lucrative dropshipping business:
1. Market Strategies
Dropshipping helps you develop the best market strategies. The dropshipping business is not viable in the long run. It will make you efficient in marketing strategies. It will give you a broad opportunity to check worthy products. You can use dropshipping to mitigate the risk factors of trying out new products. You can test any product as you do not need to have the inventory or warehouse. It will give insight into the product quantity. That is, the quantity you can sell over the period. You can also check the risky items via dropshipping before considering stocking it. You might get successful in products in the same category but not the others. For example, you have sold the unicorn cake toppers quite well. In contrast, you got unsuccessful with the custom-made happy birthday cake topper. That might be a miss, but you can always test by dropshipping a few products and see how it turns out.
2. Protection from overselling.
In coronavirus, unprecedented situations like these many sellers worldwide have experienced out-of-stock problems. The dropshipping is the life-savior for them as well. Dropshipping will help you fulfill your orders from other suppliers who have these.
Most sellers raise their inventory costs to drop sales, which is not a smart move. There are chances you will lose a returning customer. Dropshipping is the best solution in cases like these. This is also very useful for seasonal overflow. It is great protection against the uncertainties all sellers face.
Likewise, this also gives a safeguard against the shipping delays while stocking up. You can entertain your customers through dropshipping to keep trust in you. This will create a positive image of yours. Customers might name you as the store which never goes out of stock.
So, in other words, the dropshipping is your plan B or backup.
3. Strategic shipping systems.
Dropshipping can provide you strategic shipping solution. That is if you want or claim to be a global seller. This is the best alternative for areas where delivery is time-taking or taxes are very high. Or the shipping and all other hidden cost are getting beyond the sale price. You can target a whole seller in that region and use his inventory as yours through dropshipping. You can fulfill the order even sometimes in a day in these areas via dropshipping. For example, the order is from New Zealand and your warehouse is in Latvia. Your customer requested to provide the item as soon as possible. So you can supply him the same product from Australia through dropshipping. It is best to please a customer rather than let him wait for 45 days through dropshipping.
Moreover, when you try to infiltrate into a new area, it is the best solution. You can experiment with the selling ratio by adopting the drop shipping technique. The dropshipping will help you understand the environment. It will also tell you the procedure you need to follow.
4. High Maintenance Products
Some high-ticketing and high maintenance products come with heavy maintenance expenses. They may need a big space, a special environment, or extensive care. If you specialize in these products, it is good to go. But, when it is a subcategory, or you are experimenting with it for the first time, then it is better to dropship. These are any products that need extra fees for storing or shipping:
These products are so large that their storage prices sometimes exceed sales price.
Heavyweight products have higher shipping prices. So if you are want to sell these products, prefer dropshipping.
Fragile products :
Fragile products need intensive care. If you are an expert, it is good to go. But if it is only a side item prefer dropshipping as the sellers that are experts in these know how to handle these. Never sell fragile items right from the beginning because there are high chances of loss.
We prefer not to sell valuables for items like jewelry unless you have a fool-proof plan. Even dropshipping try a seller who is experts in this and the online market from years.
Products with expiry or sensitivity to environmental factors are high-risk items. They need special care, temperature, and humidity. If you have a facility, it is fine. But if you don’t, prefer dropshipping over self-storage unless you have one.
For starting a business the initial motive is to make customers. You can still keep your customers engaged by providing these products through dropshipping.
Dropshipping sounds very simple but it is not. Yet, it is very lucrative who are taking this as a first step to take their business online. Growing competition has lower down the profit margins. Additionally, you can not rely only on dropshipping. These five points will explain why it is hard to depend only on dropshipping:
1. Low-profit margins.
If you heard that the sellers are not as good at marketing as dropshippers that is why it is the best option, it is true. But, the growing competition in the dropshipping has lower down the profit margins. Unless you are an entrepreneur with a unique strategy and niche, it is not possible to earn a lot. That is a bitter truth. It is quite rare you can earn 5 to 6 figures in a year, in the current scenario. Even the platform you are using earns more than you. You have to pay for PayPal, dropshipping platforms, tool providers, and ad campaigns. That is roughly estimated to be 20% to 30% of the buying price. Adding to this, you will also place a profit. As many others are also selling the same product, so the profit should be quite competitive. So, you have a very small window for profits. If you are selling products worth between $5 to $20, and you are net sale is $200 a day, your profit will be $10. You can have more if your turn-over is high suppose $2000. But, after the circulation of such a high amount you are earning between $100 to $200, which is not viable. Because managing these many products, is also time-taking. But, if you are planning to shift to your product that would be a good idea.
2. High competitive environment.
Every entrepreneur and influencer in the dropshipping business will focus on low investment. But, no one will talk about the competition. Dropshipping (volume: 673,000) is in the air. Everyone talks about dropshipping. So, this is enough to clear your mind that it has a very competitive environment. Unless you are selling a breakthrough product that no one knows and you have opened the Pandora box. Or you have found out a new area audience. So, do not think that you will be earning a lot of money in a day. You have to wait, make strategies, and a lot of effort to compete with others. Starting with the lowest margins. That is the most viable solution.
3. You don’t have control over supply-chain.
Unless you are fulfilling the items yourself, you are not in control. Supply-chain puts a lot of responsibilities on you when you are selling online. You need to take care of shipping, returns, and other customer-related queries. In dropshipping, you depend on sellers. You are in direct contact with your customer. Even you are willing to help customers, but all depends on your supplier. Your supplier may not send the right item. You might get a bad review if the supplier is not cooperative. Or if the delivery is late you cannot take all in your hand because strings are in the hand of the supplier.
So, there are two ways to counter this. Either you do a background check of your supplier or you can sell it yourself. Yet, a background check will help a lot but uncertainties are there. You don’t know when the products go out of stock or the product sent id faulty or misplaced. Even you don’t know how the products look like in reality and what is the workability. Supply-chain is an important factor for businesses either bricks and mortar or online.
4. Legal liability issues.
The liability issue is very critical. That can ban your business or you can face penalties. You never know how much the supplier is authentic. Or do they have any license or NOC to sell the product they are selling? We see these cases with most of the new dropshippers. That is why it is very important to study about the business before starting it. Yet this is not a common one but still, a lot have faced this. Never sell items of brands. This could become a liability for you. Because you are selling it. No one knows you are a middleman.
Suggested reading:Alibaba Dropshipping Guide
How profitable is Dropshipping?
Dropshipping has slim margins. This is a disadvantage in one way. But, we cannot say that it is not profitable. In reality, the dropshipping business relays on the number of sales. Higher would be the sale higher would be the margin. When dropshipping it is best to sell low-ticket items. Yet, the product margins are low in some categories. But, many niches are still profitable. AliExpress is the best solution for dropshipping online to find a new niche. Because many manufacturers and suppliers upload products there which are new to many. If you discover these niches, you can have a high-profit dropshipping business. Yet, you need to have a lot of experience to reach that level. But don’t worry you will get experience as well when you start. Starting is important because without that you will not be able to get experience. The internet world is massive in its entirety. There are many possibilities. We can not assess the capabilities of humans, they are uncertain as well. It is still possible that you succeed beyond expectations. Our motive is to make you aware not to demoralize. So, go ahead, get a start, you might be better from the rest. The information we have provided is general. Exceptions are always there. As some products are always in the high sales category, so many people adopt these niches. These niches are super-competitive niches and most people follow these for securing sales. But, if you go out of the box you may succeed.
Still, it is the general rule of thumb that dropshipping depends on the number of sales. That is the gauge of dropshipping, profitability not margins.
Suggested reading:The Profitable Products To Import From China
Evaluating Sales Channels
There are many channels or platforms for dropshipping. Let’s discuss what methods people adopt for dropshipping.
Dropshipping on Amazon
Dropshipping on Amazon is quite different and unique. For dropshipping on Amazon you must have the product. For this you need an Amazon FBA account. You will be given space by the Amazon in all the countries they are offering service. Here you do not need to fulfill the orders yourself, rather they are fulfilled by Amazon. They will take care of the shipping and returns with a small fee depending on the size, weight, and duration of the item. This is a highly profitable drop shipping method. In other words, dropshipping with very high profits. Because here you are a dropshipper but you have your product. Many manufacturers, wholesalers, and Sourcing agents help you discover your niche. You cannot sell products on Amazon without having any product, as it is their policy violation.
Dropshipping on eBay
Dropshipping on eBay is the most attractive dropshipping in Europe and the USA. As you do not need to have an inventory, to sell. Most people use AliExpress, Amazon, and other market places to source products. There is a lot of competition but you can sell products with ease. There are many drop shipping service providers that can help you with the monitoring. Following tools are famous in eBay dropshipping:
- Zic Analytics
- Price Yak
- Price Fox
- Easy Sync
- Sale Freaks
- Shop Master
- Dropship Beast
Dropshipping on Shopify
Shopify helps you dropshipping by providing you your website. You can dropship products on your website by using their Oberlo tool. They will let you understand the process by visiting Oberlo101 or dropshipping 101. They integrate your store with many marketplaces. AliExpress is the most preferred online market place.
Dropshipping on WooCommerce
WooCommerce which is the eCommerce version of WordPress also helps you with establishing your dropshipping business. They Provide the WooCommerce Dropshipping plugin offered by OPMC to dropshipping using your WordPress website. Many people are using this platform to integrate their existing WordPress website for dropshipping.
How do I start a dropshipping business?
To start a dropshipping business you just to see the funds you have. And adopt any channel of dropshipping based on the funds you have. We suggest if you are not good at marketing, have a good investment, and need to pursue a safe dropshipping business, adopt Amazon FBA. If you have long term online business plans, adopt Shopify. If you have an existing WordPress website and want more than the dropshipping, go for WooCommerce. Last, if you have a very limited budget, go for eBay dropshipping.
Using a dropshipping software
Hustle got Real is trusted by over 10,000 active users and packed with numerous user-friendly Dropshipping features. It provides exclusive solutions to manage inventory and repricing products without having any risk of running out of stock. If you are looking for a fully automated dropshipping solution to import and manage product listings from your favorite supplier, no software other than HGR can serve you best. You can start a free trial anytime by signing up HGR and creating a product listing of up to 10 products and if you find it reliable, then go on testing its premium features on the monthly subscription plan.
How to Find the Best Dropshipping Products to Sell?
Finding the best dropshipping product is quite a hefty process. You should consider the following points:
- You have to research the product on every eCommerce platform.
- Check the reviews of the products.
- Find out how much product is selling.
- Check what buyers are saying
- Consult google trends.
- Find mentors and influencers on YouTube and other Social Media.
- Check for the delivery period of the product.
- Check for the profit margins.
- Spend your time on AliExpress to check the different products.
After going through deep research, perform a critical analysis of every product. You will, in the end, have the most lucrative one. This is a time taking process. The better you analyze, the better will be the results.
Sourcing and Working With Dropshipping Suppliers and Wholesalers
When you start dropshipping business Suppliers, Sourcing Agents and Wholesalers are your best friends. You have to rely on these. The better these are, the higher the chances of profits. So, these are the best of these that we know are trending over the internet.
LeeLine Sourcing is the top of the line sourcing service providers in China. China is the hub of the eCommerce business. LeeLine Sourcing can act as your eyes and years. When you are selecting a product for your Amazon FBA, they can provide full support. They also provide Amazon prep service that is important to store items in Amazon FBA. They can guide you about the authenticity of the manufacturers and suppliers. LeeLine can also perform inspection and factory audits at your disposal.
AliExpress is the best marketplace for dropshippers worldwide. Many entrepreneurs in dropshipping prefer AliExpress because of the variety and potential new niches. AliExpress is the best solution for Small and Medium level businesses.
DHgate offers the dropshipping to sell globally. They will tell you the trending products and potential niches. They have a separate page of dropshipping products. You can find a good deal of potential dropshipping products here.
Wholesale Central is a source for wholesalers, importers, manufacturers, and wholesale products. It is a big platform for dropshippers. Wholesale Central is a B2B directory. It helps wholesale buyers find wholesale suppliers and products. They just connect business with business.
How to Make Dropshipping a Success?
To get a successful dropshipping business you have to streamline your mind. After that consider these points for possible success.
- You should have a clear vision.
- Give maximum time to learn and research
- Consider all Pros and Cons.
- Keep experimenting with different products and niches.
- Contact an experienced Sourcing Agent.
- Keep low margins.
- Initiate good and targeted Ad campaigns
- Consider email marketing as one of the options.
- Entertain your customer as much as you can.
- Give the best customer service.
- Sell products with less delivery time.
- Thank customer to generate returning customers.
- Give special discounts to returning customers.
- Choose wholesalers that have simple return policies.
- Do not rely on one source of dropshipping.
- You should always have a backup plan.
- Make a good relationship with your suppliers.
- Wait for the right time don’t lose hope, if you are not getting sales at the start.
FAQ about Dropshipping
Why dropshipping is bad?
Dropshipping is bad because there is a lot of uncertainties for the starters. Dropshipping has little margins. Growth is slow. But, if you channel your energies in the right direction you can have lucrative sales as well. Dropshipping is the business of patience. Yet it is not a long term business plan. You have to change your strategies right with the environment.
Is the dropshipping illegal?
No, dropshipping is a legal business. It is the marketing business. You are getting profit based on your efforts. Dropshipping is not something new. It is the same as the work of a service provider. You provide a marketing service to the suppliers. As long as the marketing service is legal, the dropshipping will remain legal. Yet, some platforms may not allow dropshipping. But, this does not make it illegal.
You can dropship from Alibaba only in one scenario. That is when you are dropshipping on Amazon FBA and you are buying a large amount. Else it is not possible to dropship in any other case. Yet, if any marketplace offers services like Amazon FBA, you can dropship there too.
Can I dropship on Amazon?
Yes, you can dropship on Amazon. But, there the dropshipping method is different. Because there you must have at least one product, Amazon FBA will take care of the rest. At Amazon FBA, your physical presence is not needed. Neither you have to take care of the delivery and returns. You only have to focus on sales and marketing. So, in this perspective this is a dropshipping business, and Amazon FBA allows it.
Can I dropship on eBay?
Yes, you can dropship on eBay. eBay’s dropshipping is quite famous in Europe and North America. People worldwide practice this dropshipping. This is the cheapest dropshipping method. Likewise, profit margins are also low because of the super-competitive environment.
Suggested reading:Sell Amazon vs Ebay – Which is Better : Ultimate Guide 2020
Are there dropship companies with no membership fees?
Almost every dropshipping service provider charge one way or the other. Yet, some drop shipping service providers offer a free trial at the start. Some of them offer free services for fewer products. But, eventually, they will be going to charge you one way or the other.
But, they do not charge a lot. 99.8% of the sellers can pay their charges easily in the first month of the sales. So, this is nothing to worry about.
What sites allow dropshipping?
Many sites allow dropshipping. For example:
- Clearance King
- Worldwide Brands.
- Wholesale Central.
- Sunrise Wholesale.
- National Dropshippers.
Is dropshipping still profitable 2021?
Yes, dropshipping is still profitable. Because not only the dropshippers have increased but many businesses also came online. After the episode of COVID-19, we expect more business will try to find online solutions. So, dropshippers will find many new niches to sell online. 2021 is the high time to sell online and adopt the dropshipping. But you need to shift the dropshipping business to your online store with owned items in the long run. This will help you establish a permanent and high-profit business online.
How Leeline Sourcing Help You Find The Best Dropshipping Suppliers and Wholesalers
Leeline is one of the best sourcing agents in China. With decades of experience, we can help you find the best suppliers and Wholesalers in China. Leeline has sourced the items in almost every part of the world. That is why we know all the realities and modes of shipping and services. Experienced customer service will help you equip with all what you need in China.
Leeline also provides Factory Audit and Inspection services. With this, you will be able to check the quality of the product before sending it to your warehouse.
Leeline Sourcing also provides a one-point collection service. That is you can collect your items at a single point and source it all together. If you have any issue about dropshipping, Leeline sourcing will act as your eyes and ears. We will help you in every possible manner. Simply contact us here.
Final thoughts on dropshipping
The bottom line is, do not waste a lot of time figuring out the best possible solution. That is all in dropshipping what we have discussed here. Now, you have to go through a few things in detail. Never lose hope 2020 is the best time to start an online business. We always suggest starting with the dropshipping to understand the environment. Do you know what is the top reason that many fail in dropshipping? It is that they never try it.
You do not need to be too perfect. You need to start rolling. As the rolling stone, gather no moss. Likewise, you only have to take the first step, after some time you will understand all about it.
Take dropshipping as a first step to make your own business or brand. You will learn so many things. Simple is that, dropshipping is the prerequisite of online eCommerce business these days. No other time is better than today. Dropshipping (volume:673,000) is the proof of people looking for the opportunity in it.
At start do not focus on the money, focus on the service you are providing your customer. The better you are at customer service, the better you can earn in the long run.
Never be afraid of mistakes. Every successful entrepreneur has gone through mistakes. So, it would never be a perfect way. Give it a go fearlessly!